Mean Gene
I kept on telling people here that there were other options on the table. That management chose this route in order to continue diluting the existing shareholders even more. You saw everybody's reaction.
If selling the company and paying the shareholders the most for their investment was the idea, they would have asked for the other extension on the $1 bid price and had until May 2017 to meet this requirement. In other words, they would have had more time make a decision on the reverse split.
They then would have gone down this S1 route after the launches that would have surely propped up the price ( remember they said 10 launches / re-launches by 2Q 2017 ).
So they raise the money and see where they are at. If the NASDAQ requirements would have not been met by this time. Then they could have had a shareholders meeting to bring up the options ( if they really had their shareholders best interest in their mind ).
Either way, at that point they could have reverse split or allowed the company to be delisted. If they chose the delisted option, they would have to let the shareholders know what the end goal was. Selling the company once FDA approval was obtained and returning the most equity for your shares.
Their cash burn was $800 k per month but they would have had quite a bit of money still coming in from the royalties. France by themselves contributed over $600 k in royalties last year. They already had 10 countries selling Vitaros by the end of 2016.
They obtained royalties for $1 million in 2016 with only 3 of those countries selling year round. I certainly think that they would have been able to obtain $2 m in royalties in 2017 plus any launch / regulatory milestones. Don't forget that they still had China, Japan, India and a few other countries still to license the rights. People think they could not made a deal getting them $200k - $1 m upfront?
Bottom line. They would have been in a better position to return more money to their shareholders had they gone down this route. There were $130 m+ in negotiated milestones associated with Vitaros ex- U.S. Now Apricus has access to $0 of them.
They sold more than half the company ( the revenue generating portion of it ) and we as shareholders obtained nothing for it.
Now everybody's hopes are on the FDA approval. What happens if the FDA issues another CRL? You guessed it, more dilution.
There are 7.7 m shares outstanding. My guess is that you guys are going to be diluted about about 50%. 11 Million + shares outstanding is what is going to be left after the dust settles this time around.
You guys are going to be forced to approve the increase to the authorized share count to 30M. Because the company will not have any other option if the FDA issues a CRL or blindsides you guys in any way. Not to mention that company's management also gets paid with stock and they would not be able do this. This route is a heads you lose - tails they win situation.
Mean Gene, are you aware that Richard Pascoe's total compensation for 2016 was over $1 million dollars ( after you add up his salary, the stock awards and the option awards )? Of course, only
about $500k was paid in cash.
That's just Richard Pascoe.
Like I said, heads you lose - tails they win.
Good luck guys!
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